According to economic analysis, holding just 1% of BTC in a predominately cash based portfolio will consistently yield a better return than a portfolio made up of S&P 500, US Treasury Bonds and Gold.
This revelation was based on analytics sourced by an economics analyst going by the twitter handle “plan b”.
Within a Tweet, Plan b laid out a graph detailing the perfomance of several varying portfolios:
S&P500, Gold & US 10Y Treasury bonds are on a nice risk/return-line. Investors can do slightly better by mixing assets and capture correlation.#bitcoin risk/return is another universe. 1%BTC + 99%Cash portfolio: 10% return + max 1% loss, beating S&P on 2Y risk/return EVERY YEAR pic.twitter.com/KZaBjXogom— planB (@100trillionUSD) February 8, 2019
according to the analyst, while a combination of Gold, treasury bonds and S&P 500 stocks have a “nice risk/return line,” the addition of 1% Bitcoin into a 99% cash portfolio can dramatically increase return while keeping risk to a minimum.
Moreover, increasing to a 2% BTC / 98% cash portfolio doubles the return percentage, while only slightly increase risk by a factor of less than 5%.
However, this is no revelation, as reported in September of last year, Economists at Yale University conducted a comprehensive economic analysis of BTC, concluding that investors should hold a portfolio of 6% if they’re bullish on BTC, 4% if they’re on the fence and 1% if they’re bearish.